EUR/USD fails to move back into positive territory, back at 1.1040

The EUR/USD pair's recovery seems to be gaining traction, with the pair nearly filling the weekly gap down opening on Monday before retracing back to currently trade around 1.1040 level.

In the aftermath of last week's historic decision by UK to leave the European Union, the pair opened lower on Monday as fresh wave of global risk-aversion kicked-in after Moody's downgraded the outlook for the Aa1 British government debt from "stable" to "negative". 

The pair, however, managed to hold within Friday's trading range and as equity markets across the world showed some signs of stability, the pair managed to stage a recovery from lower level. However, the recovery momentum got sold into and the pair dropped back into the negative territory. 

Going forward, with empty economic calendar investors will take fresh impetus from developments surrounding the much talked about Brexit referendum and risk sentiment around equity markets.

Technical outlook

Mohammed Isah, Technical Strategist at FXTechstrategy, notes, "With EURUSD closing strongly lower the past week, more weakness is envisaged. However, we may see it recover higher in the new week on correction. Support lies at the 1.1050 level. Further down, support comes in at the 1.1000 level where a violation will aim at the 1.0950 level. A break of here will target the 1.0900 level. Conversely, on the upside, resistance comes in at 1.1150 level with a cut through here opening the door for more upside towards the 1.1200 level. Further up, resistance lies at the 1.1350 level where a break will expose the 1.1400 level. All in all, EURUSD remains biased to the downside in the short term."